In a CNBC TV 18 special, Gautam Thapar, Group Chairman and CEO of Avantha Group, Arun Maira, Member of Planning Commission, and Sunil Kant Munjal, Non-Executive Director, Hero Honda, discuss inclusive growth strategies for India. The group explains that certain sectors and value chains better lend themselves to inclusive business models than others, but that if a company looks closely across its value chain, there is likely at least some small component that can be geared towards lower-income consumers or producers.

We have often heard the government talk about inclusive growth, but is there a role which industry can actually play to further the cause of inclusive growth.

In a CNBC TV18 special in association with Accenture, CNBC-TV18’s Shereen Bhan spoke to Gautam Thapar, Group Chairman and CEO of Avantha Group; Arun Maira, Member of Planning Commission and Sunil Kant Munjal, Non-Executive Director, Hero Honda about India’s quest for inclusive growth.

Q: Is there such a thing as inclusive business? There can be a good business or a bad business and a good business if it is just, if it is equitable and if it is fair should also be an inclusive business?

Thapar: Partly. It has to do with the laws in the country and they way things are structured. We have two businesses that are quite inclusive. One is the pulp and paper business and the other is the fruits and vegetables business. When you start looking at the chain, you understand that it is not only about growing the trees. In the second year, after the intercrop, what are we supposed to be doing?

Q: Is it a business imperative in that sense?

Thapar: It is and it becomes part of your business model, they are included in it and then you move from there to getting them organized. We have got our first primary producer cooperative going. We have got Rs 10 crore of refinance from NABARD for the first time in the history of this country for a PPC.

You then start going out and figuring where the value chain is, what are the impediments to doing that and who can you go within the system. Actually, the system provides for everything. You just have to go out and convince them that it will work.

Q: What is the role of business then in promoting the agenda of inclusive growth? Is business an opportunity, about profitable opportunity and that then becomes the part and parcel of this inclusive agenda?

Thapar: I don’t think every business can have an inclusive growth model. There are some that lend themselves to it better, some that don’t. The ones that don’t end up being more a philanthropic model than an inclusive growth model. At the end, at some point down that value chain, you will find something that can be inclusive.

If you approach the business by saying – Look, I have a value chain that starts from here and ends here in the market place; somewhere along that value chain I will find something that is inclusive.

Q: Inclusive growth, the manner in which we are discussing it, it goes beyond corporate social responsibility and beyond philanthropy. A lot of this becomes business imperatives, doesn’t it?

Maira: I want to talk about the much bigger picture. Talking about the growth of the economy, and inclusion of people in the growth of the economy, is a subject which is very much in the air now. We grow at 9% or we may grow at 10%, but all the people at the bottom of the pyramid, being included in that growth is what is important.

People get included in the growth if they are going to be earning something and then they save and they invest and they consume, that is genuine inclusion in growth. Handing out things to people, by the taxes of those who have earned a lot already, and then delivering something’s to them, that is s a more socialist way of inclusion. However, we need a more productive way of including people.

Come to another relationship between business and people at the bottom of the pyramid. As CK Prahalad had put it, there is profit to be made at the bottom of the pyramid, if businesses graft products which people at the bottom of the pyramid can afford at the low incomes that they have. Now, we come to the question of redesigning your business model, so that more people are engaged in productive activities, are contributing to your growth and thereafter, the nation’s growth and earning at the same time.

I will go even further than that. Businesses do not like to employ so many people. Why do you want to employ these people? What about businesses of the people? People own their businesses, but they are part of your larger enterprise, essentially, businesses for the people, businesses by the people and businesses of the people. This is democracy and capitalism together. In this way, we can be having a capitalist economy, in which people are producing and are included in the growth of the economy. It is requiring business people to rethink their business model.

Q: Would you agree that there are only certain kinds of businesses that lend themselves with this kind of inclusion along the value chain while you are actually trying to penetrate into the rural markets by including the community that you are trying to address and service. Do you think every business can adopt this kind of rethinking, reshaping that we are talking about?

Munjal: It is clear that every company and every business cannot do this. There are many who can be innovative and widen their markets or their sourcing to include parts of the population and parts of the economy which are currently either not included or actually getting left behind from this new economic miracle that we all see around us.